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HMRC Publish Data On Regional Tax Receipts

Tuesday, 08 October 2013   (0 Comments)
Posted by: Author: Chartered Accountants Ireland
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Author: Chartered Accountants Ireland

This newly launched publication from HMRC seeks to "disaggregate” or "apportion” total UK tax receipts to England, Wales, Scotland and Northern Ireland. The publication seeks to measure the true economic incidence of taxation in the UK, based on the underlying activity, which can often differ from how or where the tax receipts are collected. So what can we glean from the publication and what does it tell us about Northern Ireland?

As with any publication of this nature, HMRC recommend that the user take appropriate caution when using it. This particular publication carries another "health warning” in that it is referred to as "experimental”. Whilst actual administrative data is available for capital gains tax, inheritance tax, stamp duty land tax and child/working tax credits and child benefit, for the others (including income tax, corporation tax and VAT) the estimates are arrived at using what HMRC refer to as "best available data and statistical techniques, including assumptions and adjustments where necessary”. Perhaps this caveat alone is the most telling fact about the publication, that HMRC’s systems simply cannot cope with accurate cutting and probing of tax receipt data on a geographical basis.

And in the context of the on-going political debate into devolving tax powers to Northern Ireland and Scotland, it cannot come as a surprise that the publication stresses the numbers therein "do not represent an estimate of the tax revenue that would be raised if each tax was set at the devolved level”.

Looking at the publication in terms of overall trends, the wider UK economic situation clearly influences the total receipts received in each of the four areas. In all four areas receipts increase from 1999-00 up until 2008-09, then decreased in all four areas, before starting to increase again from 2010-11 onwards. The percentage of UK receipts has remained fairly constant for England, Wales and Northern Ireland.

In 2012-13 as a % of total tax receipts in the UK, NI is seen to contribute 2.6% to the UK total, the smallest of any UK region. In the context of the long-awaited desire to reduce the NI corporation tax rate, it is interesting that the NI tax take from corporation tax "onshore” and "offshore” is in the region of £613 million. How this sits with HM Treasury’s estimated data on the size of the corporate tax base in Northern Ireland as part of the 2011 consultation on "Rebalancing the Northern Economy” is no doubt interesting and worthy of comment. But as an overall observation - Mr Cameron, that’s a tiny proportion of the overall UK tax take in 2012-13 of over £469 billion.

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